A BILL to amend and reenact §12-4-14 of the Code of West Virginia,
1931, as amended, relating to persons who receive state funds
or grants; clarifying when audits of state funds or grants are
required; and adding criminal penalties.

Be it enacted by the Legislature of West Virginia:
That §12-4-14 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:ARTICLE 4. ACCOUNTS, REPORTS AND GENERAL PROVISIONS.

(a) For the purposes of this section:
(1) "Audit" means an engagement, such as an agreed-upon
procedures engagement or other attestation engagement, conducted
and prepared by a certified public accountant to test whether the state funds or grants were spent as intended. The term "audit"
does not mean a full-scope audit or review of the person receiving
state funds.
(2) "Person" includes any corporation, partnership,
association, individual or other legal entity.(a)(b)(1) Any corporation, association, or other organization
person in West Virginia that is not a local government as defined
in section one-a, article nine, chapter six of this code and which
who receives state funds or grants in the amount of fifteen
thousand dollars or more shall file an audit of the disbursement of
the funds or grants with the Legislative auditor's officeAuditor
when the person receives funds or grants from one or more state
agencies in a calendar year totaling fifty thousand dollars or
more.
(2) Notwithstanding the provisions of subdivision (1) of this
subsection, if a person is reimbursed for expenditures made for
qualified purposes by providing receipts for the expenditures prior
to receiving the funds or grants, no audit is required.(c)(1) The audit shall be filed within two years of the end of
the year in which the disbursement of funds or grants by the
grantor andwas made. The audit shall be made by an independent
certified public accountant at the cost of the grantee and show
person. The scope of the audit is limited to showing that the funds
or grants were spent for the purposes intended when the grant was
made.(2) A person failing to file a required audit within the two-year period for any state funds or grants disbursed after the first
day of July, two thousand three, is barred from subsequently
receiving state funds or grants until the person has filed the
audit and is otherwise in compliance with the provisions of this
section.(d)(1) The state agency administering the funds or grants
shall notify the grantee of the reporting requirements set forth in
this section.
(2) The state agency administering the funds or grants shall,
in the manner designated by the Legislative Auditor, notify the
Legislative Auditor of the amount of the funds or grants to be
disbursed and the identity of the person authorized to receive the
funds within thirty days of making the grant or authorizing the
disbursement of the funds.A grantee failing to file a required audit within the two-year
time period is barred from subsequently receiving state funds or
grants until the grantee has filed the audit and is otherwise in
compliance with the provisions of this section.(3) All state agencies making grants or disbursing state funds
to persons that may be required to file audits under this section
shall, prior to making grants or disbursing state funds, take
reasonable actions to verify that the person is not barred pursuant
to this subdivision from receiving state funds or grants. The
verification process shall, at a minimum, include:(A) A requirement that the person seeking the state funds or
grants provide a sworn statement from an individual authorized to represent the person that the person has filed all audits required
under this section; and(B) Confirmation from the Legislative Auditor by the agency
that the person has not been identified as one who has failed to
file an audit under this section.(4) The Legislative Auditor shall maintain a list identifying
persons who have failed to file audits required under this section.
The list may be in the form of a computerized database that may be
accessed by state agencies over the Internet.(b)(e) Audits of state funds or grants under fifteen thousand
dollarsnot required under the provisions of this section may be
authorized by the Joint Committee on Government and Finance to be
conducted by the Legislative auditor's officeAuditor at no cost to
the grantee.: Provided, That(f)(1) Volunteer fire departments satisfy the audit
requirements of this section by submitting a sworn statement of
annual expenditures to the Legislative auditor's officeAuditor,
along with a filing fee of seventy-five dollars, on or before the
fourteenth day of February of each year, if the volunteer fire
department elects not to be audited. The sworn statement of
expenditures shall be signed by the chief or director of the
volunteer fire department and shall be made under oath and
acknowledged before a notary public.(2) An additional filing fee of twenty-five dollars shall be
included with the sworn statement of annual expenditures if the
statement is submitted between the fifteenth day of February and the fifteenth day of March.(3) An additional filing fee of fifty dollars shall be
included with the sworn statement of annual expenditures if the
statement is submitted between the sixteenth day of March and the
fifteenth day of April.(4) If the sworn statement is not submitted on or before the
fifteenth day of April, the volunteer fire department shall file an
audit of the disbursement of funds, made by an independent
certified public accountant, with the Legislative auditor's office
Auditor no later than the first day of July. The audit shall be
made at the cost of the volunteer fire department.(5) If the audit made by the independent certified public
accountant is not filed with the Legislative Auditor by the first
day of July, the Legislative Auditor shall notify the State
Treasurer who shall withhold payment of one thousand dollars from
any amount that would otherwise be distributed to the fire
department under the provisions of sections fourteen-d and thirty-
three, article three, chapter thirty-three of this code and section
sixteen-a, article twelve of said chapter and pay the amount
withheld to the fund from which it was distributed to be
redistributed the following year pursuant to the applicable
provisions of those sections.(6) If the volunteer fire department does not timely file a
sworn statement of annual expenditures or an audit of the
disbursement of funds, made by an independent certified public
accountant, with the Legislative auditor's officeAuditor for three consecutive years, the Legislative Auditor shall notify the State
Treasurer who shall withhold payment of any amount that would
otherwise be distributed to the fire department under the
provisions of sections fourteen-d and thirty-three, article three,
chapter thirty-three of this code and section sixteen-a, article
twelve of said chapter and pay the amount withheld to the fund from
which it was distributed to be redistributed the following year
pursuant to the applicable provisions of those sections.(c)(7) The office of the Legislative Auditor may assign an
employee or employees to perform audits at the direction of the
Legislative Auditor of the disbursement of funds or grants to
volunteer fire departments. The volunteer fire department shall
cooperate with the Legislative Auditor, the Legislative Auditor's
employees and the State Auditor in performing their duties under
this section.(8) If the Legislative Auditor determines a volunteer fire
department is not cooperating, the Legislative Auditor shall notify
the State Treasurer who shall withhold payment of any amount that
would otherwise be distributed to the fire department under the
provisions of sections fourteen-d and thirty-three, article three,
chapter thirty-three of this code and section sixteen-a, article
twelve of said chapter until the Legislative Auditor informs the
Treasurer that the fire department has cooperated as required by
this section. The State Treasurer shall pay the amount withheld
into a special revenue account hereby created in the State Treasury
and designated the "Volunteer Fire Department Audit Account".(9) If, after one year from payment of the amount withheld
into the special revenue account, the Legislative Auditor informs
the State Treasurer of continued noncooperation by the fire
department, the State Treasurer shall pay the amount withheld to
the fund from which it was distributed to be redistributed the
following year pursuant to the applicable provisions of those
sections.(d)(10) Filing fees paid by volunteer fire departments
pursuant to this section shall be paid into a special revenue
account created in the State Treasury known as the Special
Legislative Audit Fund. Expenditures from the fund are authorized
to be made by the Legislative auditor's officeAuditor solely for
the purposes of payment of costs associated with the audits
conducted pursuant to this section.Any person who files a fraudulent sworn statement of
expenditures under this section is guilty of a felony and, upon
conviction thereof, shall be fined not less than one thousand
dollars nor more than five thousand dollars or imprisoned in a
state correctional facility for not less than one year nor more
than five years, or both fined and imprisoned.(e)(11) Whenever the State Auditor performs an audit of a
volunteer fire department for any purpose the Auditor shall also
conduct an audit of other state funds received by the fire
department pursuant to sections fourteen-d and thirty-three,
article three, chapter thirty-three of this code and section
sixteen-a, article twelve of said chapter. The Auditor shall send a copy of any such audit to the Legislative Auditor. The
Legislative Auditor may accept an audit performed by the Auditor in
lieu of performing an audit under this section.(f)(g) Any audit submitted pursuant to the provisions of this
section may be filed electronically in accordance with the
provisions of article one, chapter thirty-nine-a of this code.(h) Any person who files a fraudulent sworn statement of
expenditures under subsection (f), a fraudulent sworn statement
under subsection (d), or a fraudulent audit under this section is
guilty of a felony and, upon conviction thereof, shall be fined not
less than one thousand dollars nor more than five thousand dollars
or imprisoned in a state correctional facility for not less than
one year nor more than five years, or both fined and imprisoned.